Does Floyds 99 require a national marketing contribution from franchisees?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
When combined with Franchisee's National Marketing Contribution (described above in Section 13.2), Franchisee's total advertising obligation (the National Marketing Contribution plus Local Advertising Allocation) will not exceed 4% of Franchisee's Gross Sales.
The Franchisee will submit to the Franchisor an accounting of the amounts spent on local advertising within 20 days following the end of each calendar quarter.
If the Franchisee's lease requires it to advertise locally, the Franchisor may, in its sole discretion, count such expenditures toward the Franchisee's Local Advertising Allocation under this Section 13.3.
The Franchisee shall obtain the Franchisor's prior written approval of all written advertising and promotional materials before publication.
If the Franchisee fails to spend the Local Advertising Allocation, this Agreement will be subject to termination under Section 20.2 below or, in the Franchisor's sole discretion, the Franchisor may purchase local advertising for the Franchisee and the Franchisee will be obligated to reimburse the Franchisor for all such purchases.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, franchisees are required to contribute to the National Marketing Fund. The purpose of this fund is to maximize the recognition of Floyds 99's trademarks and increase customer traffic to its shops. Floyds 99 directs all advertising and marketing programs financed by the National Marketing Fund and has sole discretion over creative concepts, materials, endorsements, market placement, and overall administration.
The funds may be used for various advertising and marketing activities, including preparing video, audio, and written materials, electronic advertising (website, social media, email), agency costs, gift card programs, customer loyalty programs, in-shop music streaming, employee incentives, training, multi-regional advertising, public relations, market research, and third-party shopping services. The National Marketing Fund will be accounted for separately from Floyds 99's other funds and will not be used for general operating expenses, except for reasonable administrative costs.
Floyds 99 also requires franchisees to spend at least 1% of their quarterly Gross Sales on local advertising to promote their shop. Floyds 99, however, has the right to increase this minimum to 2% of the franchisee's total Gross Sales per calendar quarter. When combined with the National Marketing Contribution, the total advertising obligation for a franchisee will not exceed 4% of their Gross Sales. Franchisees must provide an accounting of their local advertising expenditures to Floyds 99 within 20 days after each calendar quarter. If a franchisee fails to meet the local advertising requirement, Floyds 99 may terminate the agreement or purchase local advertising on the franchisee's behalf, with the franchisee obligated to reimburse Floyds 99 for these costs.